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TMI Blog2018 (9) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... ds compensation/damage for settlement of dispute is capital receipt, hence not taxable - addition to be deleted - decided in favour of assessee - ITA No.2792/Mum/2016 - - - Dated:- 23-5-2018 - Shri SaktijitDey, Judicial Member and ShriN.K. Pradhan, Accountant Member For The Appellant : Shri Saurabh Deshpandey For The Respondent : Shri Pankaj K. Jain ORDER Per SaktijitDey, JM This appeal has been filed by the Revenue against the order dated 04.01.2016 of the Commissioner (Appeals)-4, Mumbai for A.Y. 2011-12. 2. The solitary issue arising for consideration in the present appeal is, whether the damages/compensation received by the assessee amounting to ₹ 6,97,94,580/- is to be treated as capital re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the SCB insisted that a joint mandate be given by Atlas and Grandway to sell their entire holdings so that a better value can be obtained for the shares. Accordingly, Atlas and Grandway and the shareholders of these companies were requested to sign a joint mandate in favour of SCB. It was submitted that though the assessee was requested to sign the mandate by the other shareholders, he refused to do so. It was submitted, on 24.03.2010 assessee received a letter from Clifford Chance Pte. Ltd., acting on behalf of SCB with an enclosure which was a mandate signed by the shareholders of Atlas and Grandway. Assessee was surprised to find that the mandate bore his signature. Therefore, on 19.04.2010 assessee filed a criminal complaint with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e towards compensation/damage is to be treated as income of the assessee and taxable in the impugned assessment year. Accordingly, he added back the amount of ₹ 6,77,94,580/- to the income of the assessee. Being aggrieved of such addition assessee preferred appeal before the learned Commissioner (Appeals). 4. After considering the submissions of the assessee and relying upon certain judicial precedents learned Commissioner (Appeals) accepted assessee s claim that the amount received by him towards compensation/damage is in the nature of capital receipt, hence, not taxable. Accordingly, he deleted the addition. 5. Before us the learned D.R. relied upon the observations of the AO. 6. The learned A.R. strongly relying upon the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute between him and some other party resulting in filing of a criminal complaint. That being the case, the amount received towards compensation/damage cannot fit in to the definition of income as per section 2(24) r.w.s 4 of the Act. This view of our gets support from the decision of the Hon'ble Jurisdictional High Court in the case of Amar Dye Chem Ltd. (supra) wherein the Hon'ble High Court held that the amount received towards compensation/damage for settlement of dispute is capital receipt, hence not taxable. Same view was expressed by the ITAT Mumbai Bench in the case of Vinay P. Karve (supra). The learned D.R. has not brought to our notice any contrary decision. In view of the aforesaid, we do not find any infirmity in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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